FERC Approves New Market Monitor Provisions for ISO-NE
On June 30, 2015, FERC approved most of the proposed tariff revisions in a joint proposal from the ISO New England, Inc. (“ISO-NE”) and the New England Power Pool (“NEPOOL”) Participants Committee addressing the ISO-NE’s market monitor rules. Specifically, the proposed revisions are designed to mitigate the potential to exercise market power in the ISO-NE Forward Capacity Auction (“FCA”), which is used to secure capacity in ISO-NE three years in advance of the relevant delivery year. Going forward, the new rules approved by FERC will be implemented in ISO-NE’s next FCA in February 2016.
In general, ISO-NE and NEPOOL’s proposal contained four primary revisions: (1) increasing the dynamic “de-list bid threshold” – the lowest price at which resources are willing to supply capacity – from $3.94/kW-month to $5.50/kW-month; (2) limiting the amount, and flexibility, by which capacity suppliers can modify or withdraw their original static de-list bids after submission; (3) establishing a single pivotal supplier test for both capacity imports and existing capacity supply resources; and (4) revising the rules governing import capacity resources depending on whether the imports are more like existing or new resources. According to the joint filing, the proposed revisions received over 85 percent approval from ISO-NE stakeholders.